What do I need to run a development environment locally with multiple ASP.NET applications. I have Windows XP, with what seems basic IIS. Im getting tired of opening up Visual Web Dev Express every time I want to view a website project.
Depends on what you want your IIS configuration to look like. You can do it locally on XP by configuring a virtual directory for each application. Alternatively you could run a virtual Windows 2003 server and use it's "complete" edition of IIS6 which allows for multiple web sites and application pools (that's a bit overkill, even if closer to a production environment).
Not quite sure what you're getting at with your last statement about opening Visual Web Dev Express.
You are not limited to only using the on-demand web server built into Visual Studio (which, as you say, is annoying in that it only runs while your application is running within Visual Studio). The full version of IIS for any desktop or server edition of Windows (NT or later) is available on your Windows installation media, and can be installed in the same way as any other optional Windows component. In the case of Windows XP, you would click on the following to install IIS 5.1:
A great online resource for using IIS is Microsoft's IIS site, www.iis.net. Note that while the site is focused more on IIS 7.x, most articles on the site give compatibility information for prior versions.